Friday, April 28, 2006

Denver Defaults 'Hammering The Market'

Some reports on on Denver area defailts. "The Denver-are first-quarter vacancy rate fell to 7.4 percent from 9.3 percent a year earlier, marking the fifth consecutive quarter that the vacancy rate has improved. Rising real estate foreclosures, escalating interest rates, an improving economy, and little apartment construction, all bode well for the market, said Gordon Von Stroh, a professor at the University of Denver."

"Jeff Hawks, an apartment broker and principal of Apartment Realty Advisors, said that rising foreclosures, while hammering the housing market, is good news for apartments. 'There are 600 foreclosures a month,' Hawks said. 'And unlike during the downturn in the 1980s, people losing their homes are staying in the area. So almost all of them are going to rent apartments.'"

"The owners of many apartment communities who in the past wouldn't rent to people who lose their homes because they considered them bad credit risks, are now opening their doors to them. 'They realize these are pretty good renters, because there is no chance of them buying a place and moving out of their apartments any time soon,' Hawks said."

"Colorado reported 5,392 foreclosures in March, the highest rate per household of any state."

"Although vacancy rates are dropping, developers aren't rushing to build new apartment communities. 'There has been no rent growth, so it's hard to project rents high enough to justify new construction,' Steven Rahe said."

Tuesday, April 25, 2006

Foreclosures Up Triple Digits In The South

The Memphis Business Journal has this report on defaults in that state. "Tennessee ranks among the top 10 foreclosure rates in the nation for the first quarter of 2006. Foreclosures in Tennessee were on the rise in the first quarter of 2006, with a 92 percent increase from the previous quarter and a 147 percent increase from the first quarter of 2005, according to RealyTrac."

"Tennessee ranks among the top 10 foreclosure rates in the nation for the first quarter of 2006. Nationwide leaders in the number of reported foreclosures during the first quarter are Texas, Florida and California, with 40,236; 29,636 and 29,537 respectively."

"Georgia was at the top of the nationwide foreclosure rate in the U.S. for the quarter, with one in every 127 households in some state of foreclosure. Regionally, Arkansas saw a 73 percent increase from the fourth quarter of 2005 for 3,706 total foreclosures, and a 105 percent increase in foreclosures compared with first quarter 2005."

Monday, April 24, 2006

Late Speculators Being 'Washed Out'

Lots of foreclosure news out today. "Foreclosures jumped 72 percent in first-quarter 2006 compared to first-quarter 2005, according to RealtyTrac. The first-quarter 2006 foreclosure report revealed that 323,102 properties nationwide entered some stage of foreclosure, up 38 percent from fourth-quarter 2005. The nation's quarterly foreclosure rate of one new foreclosure for every 358 U.S. households was higher than in any quarter of last year, the company also reported."

"'The sharp increase in foreclosures, continues a steady upward trend that we've observed since the beginning of last year,' said James J. Saccacio, RealtyTrac CEO, in a statement. 'Foreclosures have now increased in four consecutive quarters and are on track to go above 1.2 million in 2006, which would push the nation's annual foreclosure rate to more than 1 percent of U.S. households.'"

"'With the current market conditions, it's unlikely that foreclosures will return to the historically low levels they were at in recent years when interest rates hit rock bottom and home price appreciation skyrocketed in many areas of the country,' he stated. 'But it's possible that foreclosures will flatten or even move a bit lower this Spring if more buyers and investors enter the market, giving homeowners in distress a better chance of selling their properties to avoid going into default or foreclosure.'"

"Georgia documented the highest state foreclosure rate in the first quarter of 2006 – one new foreclosure for every 127 households. The state reported 24,419 properties entering some stage of foreclosure, which is more than double the number reported in the previous quarter and triple the number reported in first-quarter 2005."

"Colorado had the second highest state foreclosure rate in the nation – one new foreclosure for every 138 households and a total of 13,267 properties entering some stage of foreclosure in the first quarter. The number of foreclosure properties in Colorado more than doubled since fourth-quarter 2005 and represented a 96 percent increase from first-quarter 2005."

"Indiana was third on the list with one new foreclosure for every 165 households, and 15,261 total properties in a foreclosure process, an 84 percent increase from the previous quarter and more than double the number reported in first-quarter 2005. Nevada, Michigan, Texas, Ohio, Tennessee, Utah and Florida also were among the states with the highest foreclosure rates in first-quarter 2006."

"Mortgage foreclosure activity in the first quarter of 2006 increased significantly from the fourth quarter of 2005 in several western and southwestern housing markets. A real estate investment advisory firm reported that the biggest increases were in major urban centers. Los Angeles County recorded 6,314 pre-foreclosure filings and foreclosures through March, up from 4,911 in the fourth quarter of 2005. In San Diego the numbers jumped from 1,565 in the fourth quarter of 2005 to 2,241 in the first quarter of 2006."

"Alexis McGee said such increases coincided with cooling markets in previously overheated areas, and with the steady rise in interest rates. She added that rampant speculation in some markets, along with a slowdown in price appreciation would lead to an increase in delinquencies and foreclosures."

"'In Las Vegas, this appears to be already happening,' she said with foreclosure activity on 3,246 homes the first quarter, compared to 1,480 in the previous quarter. 'Speculators who came late to the party are being washed out of the market,' she said."

"McGee pointed to 'exotic mortgage products' that enabled many homebuyers to join the recent housing frenzy on the West Coast. In San Diego, for example, more than half of home purchases in 2004 and 2005 were financed with such loans."

"A combination of overbuilding and rampant speculation in the South Florida condo market could lead to a severe price correction. 'Local realtors there report that the speculators were selling to each other,' said Ms. McGee. 'We've seen that before, in Phoenix, AZ and Las Vegas, NV. Sooner or later they come to the end of the line and foreclosures jump.'"

"'Foreclosures are already happening at twice the national average,' she pointed out, adding that the number unsold condos in that area has reportedly doubled in the last year."

"New foreclosure filings in three Chicago metro suburban counties increased sharply month over month in February, offsetting decreases in other Chicagoland counties. 'We saw a 31% jump in Will County,' said Alexis McGee, 'as well as 29% and 18% increases in McHenry and Lake counties." She went on to say that drops in default activity in Du Page, Kane and Cook counties brought the overall Chicago metro increase down to 5%.'"

"'Nevertheless, we're seeing accelerated foreclosure activity in the midwestern states that are heavily dependent on the manufacturing sector,' said Ms. McGee. She pointed to strong increases in the number of bank owned properties in the region. 'In Michigan, for example, REO (real estate owned by bank) increased to 7,097 properties in February from 3,744 in December,' Ms. McGee said. She went on to say that in Indiana, the numbers had jumped from 1,745 to 3,307, and in Ohio from 4,187 to 7,032."

Sunday, April 23, 2006

There Are Reasons To Expect More LA Defaults

The LA Times has this on foreclosures. "Since the beginning of the year, however, foreclosed properties have started coming on the market in increasing numbers. In Los Angeles County, first-quarter figures show a 63% increase in the number of foreclosures from the same period last year. And there are reasons to expect there will be more ahead. 'Over half the loans on the books today are less than 3 years old,' said Douglas Duncan, chief economist of the Mortgage Bankers Assn. 'Loans tend to peak in terms of going into delinquency in years three to five.'"

"Adjustable-rate loans have become more popular in the last couple of years, he added. These loans tend to have a higher rate of delinquencies than fixed-rate mortgages. Plus, in the last five years more high-risk buyers have qualified for mortgages. 'Borrowers who have not always paid car loans or credit card bills on time,' Duncan said, 'and are at greater risk of missing mortgage payments.'"

"When they were plentiful in the early '80s and mid-'90s, foreclosures could be purchased for as little as half of market value, according to agent Joseph Harrison Soaris, who has been selling bank-owned properties for 25 years. Today, California foreclosures sell on average for 88 cents on the dollar, according to Rick Sharga."

"'The best deals are buying from the owner before the foreclosure,' said Alexis McGee, 'the minute the notice of default is filed.'"

"Notices of default, as well as public auctions of foreclosed properties, for Los Angeles, Orange, Riverside and San Bernardino counties are published in the Daily Commerce, a legal newspaper. The notices, which indicate a homeowner may be headed for foreclosure and a public auction, are also published in the Los Angeles legal daily Metropolitan News-Enterprise and on paid websites. Another way to find properties in the pre-foreclosure stage is through word-of-mouth. "

"'Last year, when we pulled defaults in 90008 [Baldwin Hills, Leimert Park], 90056 [Ladera Heights] and 90043 [View Park, Windsor Hills], we had three pages,' said (realtor) Patricia Penny. A recent search yielded 13 pages."

"If a defaulting borrower doesn't sell but loses a house, a public auction is scheduled. This is perhaps the hardest stage at which to buy a foreclosure. Public auctions in California require payment by cashier's check for the entire bid. Because the final amount cannot be predicted, buyers must bring one check for the minimum bid, typically the amount owed on the property, and additional incremental checks for any overbidding."

"'A lot of people make the mistake of thinking the right place to start is at the auction sale,' said Sharga of But 'that's the highest risk point of the foreclosure buying process,' he said, because the buyer is limited to a drive-by inspection of the house and doesn't know the condition inside."

"'Unless you've done your homework, you could be liable for other liens,' such as a second mortgage, he added. 'You probably want to work with a professional to get through the first purchase.' That's why home buyers frequently turn to agents."

"To find properties for his clients, foreclosure specialist Soaris works with 10 banks. When he has bank-owned property to sell, he often turns to repeat investors. He cautions that the homes often are in bad shape."

Friday, April 21, 2006

'A Remarkable Number' Of Defaults

Some foreclosure reports. "Colorado lenders and brokers have led the nation in risky mortgage schemes, luring homeowners to dangerous low-rate and interest-only loans. Now we lead the nation in foreclosures. The danger signs were clear last summer: Denver ranked fourth in the nation in interest-only loans, and more than two-thirds of homebuyers were borrowing more than 80 percent of the price of their homes. About 43 percent of all loans in 2004 were interest-only, double the national numbers."

"But bubbles burst. Now, with interest rates going up, and principle payments coming due, a remarkable number of homeowners have mortgages they can't afford."

"Thousands of homes in foreclosure could put Colorado's housing market under severe stress this summer, according to real-estate experts. Colorado reported 5,392 foreclosures in March, making for the highest rate per household of any state."

"Thirty-one percent, or 1,648, were in the preforeclosure or notification stage, where delinquent borrowers have the best chance to keep their property. Fifty-four percent, or 2,894, were headed to auction, where outside investors can claim the property by paying off the mortgage. Sixteen percent, or 850 homes, were in the hands of lenders, who are often forced to sell the properties for whatever they can get."

"Entry-level housing markets away from job centers such as the Denver Tech Center, downtown Denver and the Boulder corridor have proved the most vulnerable, real-estate analyst Mike Rinner said. Adams and Arapahoe counties are suffering the highest foreclosure rates in the state, while higher-end markets such as Boulder and Douglas counties are holding up much better."

The Boston Herald. "Shady mortgage operators have been flooding unbelievably easy credit into Boston’s neighorhoods. But the payment on all those high-interest rate, no-money-down loans may now be coming due in a tidal wave of forclosures."

"Banks and mortgage lenders have begun foreclosure proceedings on 238 homes across the city. That is a 63 percent increase over last year, reports John Anderson. But those numbers, as bad as they are, look even worse as you zero in on neighborhoods like Dorchester and Mattapan."

"Bank notices of intent to foreclose have shot up 118 percent in Ward 18, which covers Mattapan and Hyde Park. That’s 48 notices so far this year, compared to 22 during the same period in 2005. In Dorchester, foreclosure proceedings are up 43 percent so far this year."

"Behind the real estate trend are some very suspect mortgage companies from California and elsewhere that will give you a mortgage, whatever your history. Enough bad debt and bankruptcies to sink the Titanic? No problem. What these lenders won’t tell their prey is that they will just as quickly foreclose if you fall behind on the crushing monthly payments."

"If the statistics aren’t bad enough, the horror stories are even worse. There’s the poor Fields Corner homeowner who lost her two-family home, not once, but twice, to foreclosure. Undaunted after Citizens Bank foreclosed on her $159,000 mortgage in 2002, she bought it back again, this time for a bargain $310,000. A well-known 'subprime' lender provided a no-money-down loan."

"That lasted all of 14 months, until the Bullard Street home was foreclosed upon earlier this month, the second time in five years, Anderson points out. 'The last two days we had 28 more defaults,' Anderson said. 'They are just piling in, right and left.'"

Wednesday, April 19, 2006

Hot Housing Markets Now Lead In Defaults

Some foreclosure news. "The March 2006 U.S. Foreclosure Market Report shows 101,597 properties nationwide entered some stage of foreclosure in March, a 13 percent decrease from the previous month but a 63 percent increase from March 2005. Colorado’s foreclosure rate leapfrogged to highest among the states thanks to a 31 percent increase in new foreclosures from the previous month."

"The state reported 5,392 properties entering some stage of foreclosure in March, a foreclosure rate of one new foreclosure for every 339 households, more than three times the national average."

"With a total of 4,933 properties entering some stage of foreclosure in March, Indiana’s foreclosure rate, one new foreclosure for every 512 households, ranked among the nation’s five highest for the third month in a row."

"Utah foreclosures increased 21 percent from the previous month and replaced Ohio among the states with the five highest foreclosure rates. Utah reported a total of 1,437 properties entering some stage of foreclosure in March, a foreclosure rate of one new foreclosure for every 535 households and a 32 percent year-over-year increase."

"Texas documented the most new foreclosures of any state for the fourth month in a row even though foreclosures there decreased for the second consecutive month. The state reported a total of 11,951 properties entering some stage of foreclosure, a foreclosure rate of one new foreclosure for every 674 households, 1.7 times the national average."

"California reported 11,073 properties entering some stage of foreclosure in March, the second most of any state, and the state’s foreclosure rate registered slightly above the national average thanks to a 22 percent increase from the previous month."

"Florida foreclosures decreased 7 percent from the previous month and 12 percent from March 2005, but the state still reported 9,283 properties entering some stage of foreclosure in March, the third most of any state and a foreclosure rate 1.5 times the national average."

Monday, April 17, 2006

'It's Bad Out There Right Now'

The Grand Rapids Press from Michigan. "A confluence of economic events is putting more people in a place they never expected to be: the brink of foreclosure. 'It's bad out there right now," said Sean Mansell, servicing manager for Heartwell Mortgage. 'The (real estate) market is saturated. Jobs are not as plentiful as they once were, and if they are, they're typically lower wage jobs. So people have to drastically adjust their lifestyle.'"

"The number of people losing their homes on the courthouse steps is up across the country, across the state and here at home. Some people are finding they made a poor mortgage choice in the first place. Adjustable rate mortgages are leaving the homeowner at the mercy of a fluctuating interest rate. And other creative loan options allowed people to buy a home they may not have been able to afford."

"Nearly four in 10 recent homebuyers nationally put down less than 5 percent of the home's purchase price as a downpayment, while others obtained 100 percent or even more than 100 percent financing."

Sunday, April 16, 2006

Rhode Island Defaults Up 50%

The Providence Journal has this update on defaults in Rhode Island. "During the first quarter of this year, the number of foreclosure sale notices in The Providence Journal jumped nearly 50 percent, compared with the first quarter of last year. During January, February and March, there were 304 foreclosure sale notices, compared with 205 during the same three months last year. About half of the notices, 147, were for houses in Providence; another 136 were in Warwick, Cranston, East Providence, Johnston, North Providence and Pawtucket."

"Affluent communities were not exempt. Among the listings were five foreclosure sales in Barrington and three in East Greenwich."

"Providence County alone had 169 properties listed as REO sales as of Tuesday. 'We probably average one a day,' said Michael Riley Sr., a real estate agent in Cranston. He and his wife, broker Joy Riley, work for big banks or mortgage companies to market foreclosed houses. Back in the early 1990s, their business flourished amidst the ruins of the state's banking crisis."

"Lenders often want to try to sell a property 'as is,' he said, but sometimes they can't. Selling is hard these days, because there are so many houses on the market. As of last week, there were 5,288 'active' listings for single-family houses in the state."

"Most of the houses in foreclosure were bought with risky, zero-down mortgages or refinanced so the borrower could take cash out, said broker Joy Riley. She said the problem stems from mortgage brokers selling risky loans and buyers who were too eager to cash out the equity in their houses."

"'People were using their homes like they were ATM machines,' Riley said. 'Insurance is going up, taxes are going up, they can see rates are going up, so people find themselves saying, 'I can't pay anymore!'"

Friday, April 14, 2006

'Credit Woes' Push North Texans Into Default

Two updates on foreclosures in Texas. "Some North Texans are having a tough time hanging on to their houses. The number of residential properties facing foreclosure next month is up about 15 percent from a year earlier. Almost 3,000 Dallas-Fort Worth area homes are scheduled for foreclosure sale in May."

"Through the first five months, 15,336 foreclosure postings have been recorded for the area. That's an 11 percent increase from the same period of 2005. The biggest jump in May postings was in Denton County, up 28 percent. Dallas County saw a 17 percent rise in foreclosures."

"Analysts with a foreclosure consultant attribute the recent increases to consumer credit problems, not a downturn in the overall economy."

"The number of homes going to foreclosure in Tarrant County went back up from last month’s dip. Mike Fratantoni, senior economist at the Mortgage Bankers Association, said he also expects more foreclosures. He said the wave of mortgages and refinancings in 2002 and 2003 is now entering the prime default years, three to five years from the date of the mortgage. 'We haven’t hit that peak yet,' he said."

"There have been 4,715 foreclosure postings in Tarrant County in the year’s first five auctions, according to Foreclosure Listing Service. That is a 6 percent increase from the 4,447 homes posted during the first five months of 2005."

Thursday, April 13, 2006

'All Bets Are Off In Las Vegas'

An update on Las Vegas foreclosures. "The number of foreclosures in Clark County, Nevada, increased by 36 percent in the first quarter of 2006 compared to the same period in 2005. 'All bets are off in Las Vegas now. With rising interest rates and lower appreciation on the properties people own, it is obvious that the area could see an increase in foreclosures for the next several months,' said Serdar Bankaci."

"Another problem in Clark County that is contributing to the rising foreclosure number relates to the housing shortage in 2003 and early 2004. According to Bankaci, during that time, many investors bought up properties hoping to cash in as the property values went up through basic supply and demand. 'That gamble did not pay off because the housing shortage ended and these investors, who had no intention of living in the houses, were stuck with overpriced properties,' said Bankaci."

"'Many of the homeowners used 'aggressive financing' to buy homes they could not afford,' said Bankaci. 'So, now many of the homes we see going into foreclosure have little equity left in them'."

Monday, April 10, 2006

Texas And Michigan Lead In Defaults, REO's

Fitch Ratings has this report on loan delinquencies. "CMBS delinquencies have been steadily trending downward since hitting their peak at the end of 2003. Although most markets are performing well today, a lingering legacy may remain from the recent real estate downturn (2001-2003). The delinquency index is heavily weighted toward loans in foreclosure and REO properties (61.2% by balance) when stratified by loan status."

"'The majority of loans in foreclosure and REO properties (88%) were secured in older vintage deals issued between 1997 and 2001,' according to Fitch Senior Director Patty Bach."

"The largest dollar concentration of foreclosures and REOs are located in Texas (23%) and Michigan (13%), both power-of-sale states that allow quicker loan transitions from foreclosure to REO."

"Katrina-related delinquencies dropped 7% by balance on the month and now stand at $187.3 million. REO properties rose to 20.7% of Katrina-related delinquencies up 260bps from last month. 'Katrina delinquencies are declining overall, but chronic delinquencies (90-day delinquencies and REO properties) now total $180.9 million (96.6% of all Katrina delinquencies), 6% ($9.8 million) higher than last month.' stated Bach."

'Average Joes' Defaulting In LA

A report on foreclosures in California. "The number of foreclosures in Los Angeles County increased by 63 percent in the first quarter of 2006 compared to 2005. 'With rising interest rates, the economy slowing down in that part of California, and a quarter of L.A. residents working at jobs that do not pay a living wage, the significant increase in foreclosures is a very alarming trend in the largest county in the nation,' said Serdar Bankaci."

"Bankaci also noted that single family homes and duplexes were hit the hardest, increasing 77 percent and 88 percent respectively, underscoring the tough battle that the average L.A. homeowner faces to retain their property."

"'The rising foreclosures are due to the 'average Joe' buying a house he cannot afford because of inflated home prices. Then, with the rising interest rates, he cannot pay for the mortgage,' said Bankaci. Many of the homeowners used 'aggressive financing' to buy homes they could not afford."

Saturday, April 08, 2006

Foreclosure Auctions In New York

The New York Times looks at the perils of foreclosure auctions. "Buying real estate at foreclosure auctions is an alluring idea, particularly in New York where nearly everyone is scrambling for a deal. Foreclosure auctions, which occur after a lender or government agency forecloses on a parcel, building or apartment, are a judicial process in New York, meaning that they are run by the court system."

"Yet while there is a tantalizing possibility of getting a deal, people who are intimately familiar with foreclosure auctions in New York, lawyers, mortgage bankers, brokers and former auction regulars, advise steering clear of them. 'You really have sharks at these sales,' said Bruce Bronster. His litigation group has handled more than 3,000 foreclosures. 'You're a guppy. And you're going up against very seasoned and sophisticated guys.'"

"Auction regulars tend to be investors who pool their money and have ties to the construction business. They know the market, they do their research, and they have the capital and the ability to renovate properties sold 'as is.' That is a significant advantage because foreclosed properties are frequently in disrepair and the interiors can rarely be inspected before bidding. Even worse, there can be title disputes."

"Yet despite the pitfalls of foreclosure auctions, people do make money from them. Many people attempt to play by their own rules. Some try to buy not only at auction but also during the pre-foreclosure period, before a property goes to auction, by calling the owner directly. Isaac Hager, a developer, has bought several buildings at foreclosure auctions. He has his own renovation and construction teams and does so much research that he has managed to buy mortgages from banks before properties went to auction. 'It's not easy at all,' Mr. Hager said."

"Before any foreclosure auction in New York, the terms of sale and the address of the property must be published once a week for four weeks in local periodicals. So while you cannot usually get inside, you can get the address and view the exterior."

"Auctions generally take place at New York City's county courthouses. Some 70 percent of the city's foreclosure auctions occur in Brooklyn and Queens. So if you have your heart set on buying in Manhattan, you will have even less to choose from. Likewise if you want a co-op. While co-ops can be auctioned, they do not go through the courts because they are not considered 'real property' (you own shares in the apartment corporation, not the unit itself)."

"Some experts recommend bringing certified checks in various amounts ($10,000, $5,000, $1,000) to meet the 10 percent down payment because you do not know exactly how much you will end up paying. Others prefer to bring one certified check, at an amount they have decided on well before the auction, because it prevents them from overbidding."

"It is also important to do a financial projection to make sure that the discount you are getting by buying at auction is substantial enough to make the risk worthwhile. 'You have to know what liens are on the property so you know how much you're going to have to spend,' Jon Felice said. 'My gut tells me that you're buying at a discount in most instances of 30 to 40 percent.'"

"The advantage for those who want to buy a home instead of an investment property, though, is that if you are satisfied with buying at only 10 percent below the market rate, you may be in luck because investors are looking for bigger returns. Still, many foreclosures end up being bought at auction by the bank that holds the mortgage. These properties are known as real-estate-owned, and banks put them on the market for more than they paid at auction."

"Jessica Davis recommends that amateurs observe at least three auctions before bidding. 'There is no reason anyone should have an unhappy auction story if they have done their homework,' she said."

Friday, April 07, 2006

Georgia 'Leading The Way' In Foreclosures

The Rome News Tribune looks at foreclosures in Georgia. "Creative financing and low interest rates have helped millions of Americans buy homes in the last three years, but that same financing could force many people out of those homes in the years ahead, in Rome and Floyd County, as well as around the nation. Many of the adjustable-rate mortgages that homebuyers used in recent years are approaching their scheduled resets."

"'You could see higher foreclosures. I think we’re already seeing that,' said Vickie Hill, mortgage sales manager and loan originator in Rome. 'I don’t know how high it will go.'"

"Greater flexibility in mortgage financing, including wider availability of 100 percent home loans, plays a part in the trend, she said. But the problem is aggravated by people who refinance or use home equity loans up to or above 100 percent of the home’s value to pay off other debts."

"An online marketplace for foreclosure properties is already reporting a nationwide increase in home foreclosures, with Georgia leading the way. The company’s most recent report showed foreclosures in February were up 13 percent from January and up 68 percent from February of last year. Georgia posted the highest foreclosure rate in the nation for the second straight month, with one foreclosure for every 329 households."

"First American estimated that all adjustable-rate mortgages that began in 2004 or 2005 with rates below 4 percent are at high risk of default when rates reset. For example, a 30-year loan for $150,000 that began at a 3 percent introductory rate would have required a monthly payment of $632.41 to start. But if that loan were to reset next year to an 8 percent rate, the monthly payment would jump to $1,100.65, a cost increase that many homeowners’ budgets wouldn’t be able to cover."

"Dayna Crumley, branch manager of Market Street Mortgage in Rome, said that many of the recent foreclosures are young homebuyers, who have less experience at managing their personal finances. Crumley plans to start a homebuyers counseling program at her office to help educate people on their finances and what to expect in terms of homeowner expenses. 'You’ve got a lot more first-time homebuyers now than I’ve seen before,' she said."

Thursday, April 06, 2006

Foreclosures Push Denver Inventory To Record

The Denver Post has this to report on that market. "An increase in foreclosures coupled with the normal seasonal increase in home listings has pushed the number of homes on the market close to a record high. There were 27,309 homes on the market in March, up 17.6 percent from the same time last year, according to statistics released today. That's about 500 homes away from the record set in June 2004, said (realtor) Steve McGuire in Highlands Ranch."

"Independent real estate analyst Gary Bauer said inventory likely is up because foreclosures are up. 'Banks go through cycles of operations. The last few years, they maintained their own inventories,' Bauer said. 'But as things are turning around, they're using the realtors now to help them market their own property.'"

"That's been the case for broker Ed Jalowski in Denver. In the last six weeks, Ameriquest has assigned him seven listings. He estimates that of the 50 listings he has, 60 percent are either short sales or bank-owned."

Wednesday, April 05, 2006

Oklahoma Defaults At 10 Year High

An Oklahoma TV station has this on local foreclosures. "More Oklahomans are falling behind on their house payments and the number who've lost their homes to foreclosure has more than tripled in the past four years. A study by the Federal Deposit Insurance Corporation says the mortgage foreclosure rate in the state was just more than two-and-a-half percent for the last three months of 2005. That's the second-highest foreclosure rate in the past ten years."

"And two-point-one-five percent of home payments were past due during the same three months. Alan Bush with the F-D-I-C's insurance and research division says the number of late payments and foreclosures may indicate some Oklahomans haven't recovered from the recession during 2000 and 2001."

"Financial analysts also say rising interest rates are driving up payments for those with adjustable-rate mortgages and credit cards and that rising energy costs are also hurting those who live paycheck to paycheck."

Tuesday, April 04, 2006

Massachusetts Defaults High In February

Some numbers on Massachusetts foreclosures. "The number of foreclosures in Massachusetts hit a three-year high in February. Foreclosures were filed on 1,200 properties, 25 percent higher than the year before and 63 percent higher than February 2004. Compared to January of this year, foreclosures increased nearly 12 percent, with Middlesex County posting a 29 percent increase."

"'February 2006, the shortest month of the year, produced more foreclosure filings than any other month in the past three years,' said Jeremy Shapiro. 'There is no question that higher interest rates, spiraling property values, a flat economy and a myriad of other factors are combining to make 2006 another difficult year for homeowners."

"A 12-month trend comparison of March 1, 2005 to February 28, 2006 and March 1, 2004 to February 28, 2005 reveals: Foreclosures increased statewide 31.35% (11,892 v. 9,054). Three counties experienced at least 50% increases, including Barnstable (51.00% increase, 527 v. 349), Essex (50.99% increase, 1,448 v. 959) and Nantucket (50% increase, 18 v. 12)."

"In towns/cities with 10-49 foreclosures, the biggest increases were in Avon (267%, 11 v. 3), Harwich (250%, 35 v. 10), Rockport (217%, 19 v. 6), Hampden (200%, 21 v. 7), and Manchester (200%, 12 v. 4). In towns/cities with 50 or more foreclosures, the biggest increases were in Lawrence (116%, 210 v. 97), Marshfield (110%, 61 v. 29), Sandwich (89%, 53 v. 28), Wareham (81%, 98 v. 54) and Fall River (78%, 158 v. 89)."

"Comparing February 2006 to January 2006: Foreclosures increased 11.63% statewide in one month with 1,200 filed in February compared to 1,075 filed in January. Plymouth County saw a one-month leap of 34% (34.23%, 149 v. 111). Middlesex County foreclosures also climbed by nearly 30% in one month (29.27%, 212 v. 164)."

Monday, April 03, 2006

More Foreclosures Than Loans In North Carolina

The Charlotte Observer continues to follow the foreclosure situation. "North Carolina's lively real estate market has been a boon for home buyers, giving them a chance to own a new home or get a better deal on their existing loan through refinancing. But the boom has been chased by a thud for some, with foreclosures also increasing across the state, outpacing even new home loans, according to state banking commissioner Joe Smith."

"'If we compared the increase in foreclosures to the number of new mortgages, it's clearly much higher,' he told the High Point Enterprise last week."

"Home foreclosures in North Carolina have nearly tripled during the last seven years, from 15,282 in 1998 to 42,832 in 2005. The reasons are unclear. In February, Smith told the N.C. House Select Committee on Home Foreclosures that mortgage market growth has increased the risks for both home buyers and lenders. It's also led to an increase of predatory lending and mortgage fraud."

"He said problems also have arisen because of the increasing ease with which buyers can get a loan with little or no down payment. And he also cited rising consumer debt and job loss. It's impossible to say which has had the biggest impact, Smith said."

Sunday, April 02, 2006

From Dream To Nightmare In Pennsylvania

The Lebanon Daily News reports on defaults in Pennsylvania. "In Lebanon County this year, there were 23 properties, mostly in the city, listed as in foreclosure as of yesterday on the RealtyTrac Web site. By contrast, there were between 200 and 500 listings for each of the surrounding counties. Kim Brower, real-estate administrator with the Lebanon County Sheriff’s Office, said she believed RealtyTrac’s figure for the county is low.'

"'I have an average of 40 homes every other month that are on the list for foreclosure, and roughly 20 of them go to sale,' she said."

"Local real-estate agents say Stuart’s situation is typical, and they see the number of foreclosures in the county increasing. 'Sometimes in our office, we get two or three a week,' said Bonnie Koller, an agent in North Cornwall Township. Lenders often list foreclosed homes through local real-estate offices."

"James Stanilla, an agent in Lebanon County, attributes the rising number of foreclosures to lenders. 'Lenders are too lenient with second-loan guidelines,' Stanilla said. Home buyers often can get into a new home with little or no money down, he explained, and within a couple of years they can get a home equity line of credit approved quickly. 'It’s a glorified credit card, and you know what people can do with a credit card,' he said. 'Each year there are more and more foreclosures. And it’s not just homes in the median range.'"

"There are homes in foreclosure, he said, that are in the $300,000-plus range."

"If a home is still occupied, the real-estate agent can offer the occupants money to move out, the cash-for-keys program, he said. If the occupants are not willing to vacate, it then goes through a possession process. In one case, Stanilla said, he had a hard time contacting the owner of a New Street home in Lebanon. The owner agreed to leave after Stanilla offered him $500 through the cash-for-keys program."

"Stanilla, who has sold a number of foreclosed homes, said it’s not easy to evict a family. He has been met at the door by homeowners bearing guns. In those cases, he turns the case over to the sheriff."

"Some people dump trash in all of the rooms or damage the property so repairs must be made before it can be sold, Stanilla said. Others just abandon the home during the night, leaving toys and other signs of a life interrupted. Sometimes, he added, criminals turn a vacant structure into a crack house, he said. 'You never know what you’re walking into,' he said."

"For her part, Stuart advises potential home buyers to consider carefully all of their costs before buying a home. 'There are a lot of lenders out there that want to give you a loan at any cost,' she said. She suggests buyers make sure they are 'really ready to buy a home.'"

"As for Stuart, she now rents a house in Lebanon, works part-time as a real-estate agent and holds down another job. But she hopes to buy another home someday. 'It’s going to take me time to pay off my debt,' she said."